Kids' Assets and Attribution Rules

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mark
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Kids' Assets and Attribution Rules

Post by mark » Tue Nov 23, 2004 2:22 am

I will immigrate to Canada with my family next year. Two of my children, who are 4 and 6 years old, have some assets in the forms of cash and stocks which were transferred legally from elder relatives. We keep the proof of gift records. I am wondering if my children have to report their assets to Canadian Government when immigrating. If they report, is it possible that CRA attribute the incomes to me or my spouse? Thanks for your help.

nelsona
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Post by nelsona » Tue Nov 23, 2004 10:51 am

No one, including children, has to report their assets when immigrating to Canada.

Even if the money came directly from you, before you lived in Canada, the income generated would not be attributed to you.

Any income they earn will be solely in their name, unless you the parents give them funds after immigration, in which case that portion would be attributed to you.

Keep a record of the gifts, as well as the value at the time you immigrate (for ALL your families assets), as this will be used by you to determine any future cap gains.

<i>nelsona non grata</i>

Norbert Schlenker
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Post by Norbert Schlenker » Tue Nov 23, 2004 12:30 pm

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by nelsona</i>

Even if the money came directly from you, before you lived in Canada, the income generated would not be attributed to you.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">

That's incorrect. If you transfer income producing assets to a minor child or grandchild, the attribution rules apply whenever both the transferor and transferee are tax residents of Canada. Whether the transfer occurred when one or the other or both were non-resident is irrelevant. See http://www.cra-arc.gc.ca/E/pub/tp/it510/it510e.txt.html for a full discussion.

Keep the documents that show the money came from relatives who are either deceased or not in Canada.

Mark T Serbinski CA CPA
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Post by Mark T Serbinski CA CPA » Fri Nov 26, 2004 9:17 am

On a related topic, you should note that all capital property is deemed to be acquired at fair market value on the date of entry to Canada. Therefore, any unrealized capital gain or loss would not have a tax effect when the property is later sold (or when the person emmigrates from Canada).


Regards,

Mark T. Serbinski, CA, CPA

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